IWCity’s bottom line hit by Esos expenses

Artist impression of Botanica @ Tebrau Coast by Tebrau Teguh Bhd

KUALA LUMPUR: Iskandar Waterfront City Bhd (IWCity) swung to an operating profit of RM2.02mil in the first quarter ended March 31, 2017, from a RM182,000 loss a year ago.

However, a one-off corporate expense of RM54.73mil from the granting of an employees share option scheme and higher finance costs led to a net loss of RM56.45mil for the quarter, the company said in a filing with Bursa Malaysia.

In March, the property development and construction group offered 123.55 million options over new shares to the directors and employees of IWCity and its subsidiaries with an exercise price of RM1.50.

In Wednesday’s announcement, IWCity said its revenue improved by 70.5% year-on-year to RM13.65mil, which was due to a 314% jump in its property development revenue to RM11mil.

Its construction revenue, on the other hand, saw a 47% drop to RM2.8mil.

The property business enjoyed a larger profit of RM4mil (Q1 2016: RM817,000) following a higher percentage of completion of sales. The construction segment, despite the much lower revenue, generated a small profit of RM254,000 thanks to a better profit margin.

Regarding its prospects, IWCity said with the recent acceptance of the proposed merger exercise with holding company Iskandar Waterfront Holdings Sdn Bhd, the group expected that the land bank of the merged entity would rise to about 6,700 acres.

This will comprise mainly prime waterfront land in Johor and it is meant for long-term projects spanning 25 to 30 years.

“With one of the most attractive tracts of waterfront properties in the country, IWCity’s prospects remain bright and will generate significant capital appreciation and value creation,” the company said.

“The group will continue its effort in growing the existing businesses especially on the development segment by attracting more foreign and local investors’ confidence to our business development even though the property market and economic outlook for 2017 will remain tough and weak.”